Vijay Mallya's looking at TINA to save Kingfisher Airlines

The delay in FDI is only one of the many challenges that Kingfisher faces. With its coffers empty, the airline is hard-pressed to operate flights. Cancelled flights are keeping passengers away, which in turn means even less cash to fly. Put these problems together, it is easy to see why finding an investor has been difficult for Kingfisher's bosses.

Low-fare Avatar

But the airline still seems to have a few tricks up its sleeve. To get around the stigma of cancellations and fly anyhow, Kingfisher is offering the cheapest airfares in India (see India's New Low-Fare Airline). That begs the question: who is buying the airline's tickets? Cheap or not, planes have to eventually take off. In Kingfisher's case, there is no surety there.

Hriday Daswani, owner of Dynasty Tours &Travels in Mumbai, says the people flying Kingfisher booked tickets a couple of months ago. Kingfisher is also finding passengers in routes such as Delhi-Dharamsala and Delhi-Dehradun where it has a monopoly, she says.

But Daswani says on other routes, people are switching to an alternative airline like Indigo or Jet. "People hesitate to book a Kingfisher flight despite the lower fares," she says, adding that she has stopped recommending Kingfisher to passengers.

"There is too much stress not just for me but also passengers. With the holiday season here, no one wants to get stranded at the airport." Daswani says Kingfisher employees are not helping. "They just throw up their hands in despair instead of helping the passengers find another flight."

Another travel agent who sells Kingfisher tickets in bulk says passengers are offered two tickets. "Say, a ticket for a Kingfisher flight that takes off at 9 am for Rs 4,000 and an Indigo ticket for 11 am for Rs 6,000. If god willing, the Kingfisher flight does take off, the Indigo ticket is cancelled."

Kingfisher is also winding down operations in several routes. There are no flights on routes such as Delhi-Hyderabad, Delhi-Kochi and Kochi-Agatti Island.

Clock's Ticking

Despite mounting evidence of Kingfisher's desperation and calls for action, analysts and experts say it is not easy to shut the airline.

CNI's Ostwal says the government is in a dilemma over Kingfisher's fate because of its unwavering commitment to Air India, the distressed national carrier that the authorities are propping up with taxpayers' money.

There is also the issue of putting Kingfisher's more than 7,000 employees out of work and loans to the airline by government-owned lenders turning bad.

What about Mallya putting the airline on the block? "He will not sell. The valuation is quite cheap," says Ostwal. "Not that there are many takers."